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Abstract Background Membrane-type matrix metalloproteinase 5 (MT5-MMP) deficiency in the 5xFAD mouse model of Alzheimer's disease (AD) reduces brain neuroinflammation and amyloidosis, and prevents deficits in synaptic activity and cognition in prodromal stages of the disease. In addition, MT5-MMP deficiency prevents interleukin-1 beta (IL-1β)-mediated inflammation in the peripheral nervous system. In this context, we hypothesized that the MT5-MMP/IL-1β tandem could regulate nascent AD pathogenic events in developing neural cells shortly after the onset of transgene activation. Methods To test this hypothesis, we used 11–14 day in vitro primary cortical cultures from wild type, MT5-MMP−/−, 5xFAD and 5xFAD/MT5-MMP−/− mice, and evaluated the impact of MT5-MMP deficiency and IL-1β treatment for 24 h, by performing whole cell patch-clamp recordings, RT-qPCR, western blot, gel zymography, ELISA, immunocytochemistry and adeno-associated virus (AAV)-mediated transduction. Results 5xFAD cells showed higher levels of MT5-MMP than wild type, concomitant with higher basal levels of inflammatory mediators. Moreover, MT5-MMP-deficient cultures had strong decrease of the inflammatory response to IL-1β, as well as decreased stability of recombinant IL-1β. The levels of amyloid beta peptide (Aβ) were similar in 5xFAD and wild-type cultures, and IL-1β treatment did not affect Aβ levels. Instead, the absence of MT5-MMP significantly reduced Aβ by more than 40% while sparing APP metabolism, suggesting altogether no functional crosstalk between IL-1β and APP/Aβ, as well as independent control of their levels by MT5-MMP. The lack of MT5-MMP strongly downregulated the AAV-induced neuronal accumulation of the C-terminal APP fragment, C99, and subsequently that of Aβ. Finally, MT5-MMP deficiency prevented basal hyperexcitability observed in 5xFAD neurons, but not hyperexcitability induced by IL-1β treatment. Conclusions Neuroinflammation and hyperexcitability precede Aβ accumulation in developing neural cells with nascent expression of AD transgenes. MT5-MMP deletion is able to tune down basal neuronal inflammation and hyperexcitability, as well as APP/Aβ metabolism. In addition, MT5-MMP deficiency prevents IL-1β-mediated effects in brain cells, except hyperexcitability. Overall, this work reinforces the idea that MT5-MMP is at the crossroads of pathogenic AD pathways that are already incipiently activated in developing neural cells, and that targeting MT5-MMP opens interesting therapeutic prospects.